TMI Blog1991 (3) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to be manufactured inIndiain collaboration with a French company known as M/s C.G.R. France. The said business came to an end sometimes during the accounting period ending31-12-1980relevant to assessment year 1981-82. We are now concerned with assessment year 1982-83 and it is admitted to the assessee that during this year the assessee carried on no business. During the year under consideration the assessee sold its technical drawings and industrial files that it had acquired for its aforesaid business. The sale was made for a consideration of Rs. 12,48,000. It also earned profit of Rs. 31,286 on the sale of some other assets and had other income of Rs. 83,374. Thus, for the year under consideration its total receipts were Rs. 13,62,660. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the income in question. 3. Against the orders of the CIT(A) the Revenue has come in ITA No. 4684 challenging his direction for the set off of unabsorbed depreciation. On the other hand, the assessee in its appeal challenges the CIT (Appeals)'s action upholding the allowance of only 10% of the total expenditure. 4. The fact that the assessee's business had ceased in the preceding year and no business was continued during the year under consideration is no longer challenged by the assessee and, therefore, the question is whether unabsorbed depreciation of an earlier year can be set off against the income from other sources. When neither the business to which the unabsorbed depreciation relates nor any other business of the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hyderabad Construction Co. Ltd. v. CIT [1981] 129 ITR 81 (AP), CIT v. Kishanlal Sons (Udyog) (P.) Ltd. [1985] 154 ITR 735 (Cal.) and CIT v. Deepak Textile Industries Ltd. [1987] 168 ITR 773 (Guj.). In all these cases it was held that the business, to which the unabsorbed depreciation relates, need not be carried on during the year in which the set off of unabsorbed depreciation is claimed. All these are cases in which some other business of the assessee was in existence and set off of unabsorbed depreciation was held allowable against such business income. Therefore, these authorities lay down no proposition of law to support the case of the assessee that unabsorbed depreciation of an earlier year can be set off in a later year even if n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not necessary that a business, in respect of which the depreciation allowance was originally worked out, should remain in existence in such succeeding year. The observations clearly indicate that they do not apply to the situation before us in which admittedly no business whatsoever was carried on by the assessee during the year under consideration. The Hon'ble Supreme Court was dealing with a case of a partnership which continued from year to year and the only difference was that while in the earlier years, to which the unabsorbed depreciation related, it was assessed as an unregistered firm ; for the year in which adjustment as sought the firm was assessed as a registered firm. It was held that unabsorbed depreciation of an unregistered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and the authorities cited on behalf of the learned counsel for the assessee do not support the contention that even in the absence of any business whatsoever in a particular year, unabsorbed depreciation of an earlier year can be set off against income under heads other than business. We are therefore, of the view that the learned CIT(Appeals) was not justified in reversing the finding of the assessing officer and directing adjustment of unabsorbed depreciation of earlier years against the income of the assessee for the year under consideration assessed under the head 'Income from other sources'. We, therefore, set aside the CIT (Appeals)'s order on this point and restore the action of the assessing officer. 8 and 9. [These paras ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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